Smallcap, Midcap Stocks: The Indian stock market continues to decline, and its most impact is being seen on midcap and smallcap stocks. The Nifty Smallcap 100 and the Nifty Midcap 100 index today fell to about 2% in early trade on 17 February. At 10:45 am, the Nifty Smallcap 100 index was down 1.6 per cent, while the Nifty Midcap 100 index was trading by falling down by 1.1 per cent. In comparison, the benchmark Nifty 50 index declined by just half per cent and was trading at 22,842.80.
Experts had been warning for a long time over the high valuation of midcap and smallcap stocks, but retail investors ignored this warning to a great extent. Analysts said that correction was scheduled to come after the huge rise in the market, and now its effect is visible.
The Nifty Midcap 100 index has fallen by 18.9 percent from its record high. At the same time, the smallcap index has come down 22 percent from its peak, which has entered the bear market. Due to this decline, there has been a loss of about ₹ 17 lakh crore, due to which the portfolio of investors is currently in dark red mark.
Why is the decline coming?
Market experts said that US President Donald Trump recently announced to make the “Reciperochl Tariff” i.e. ‘Tit tax’ on Indian goods, after which the selling pressure on these shares increased further. Apart from this, S. Narine, Chief Investment Officer of ICICI Prudential AMC, recently advised investors to withdraw all money from midcap and smallcap funds and stop SIP, which further weakened the morale of investors.
Amish Shah, India Research Head of Bank of America Securities, says the valuation of midcap and smallcap shares is still more and there is a possibility of further decline. He said that the return of small-midcap shares can remain weak or negative as compared to largecap shares.
Analysts of Kotak Institutional Equities said, “We hope that diversification can be seen in the Indian stock market in the next few months. While large-cap stocks can live in a limited scope, while midcap and smallcap stocks can be seen in limited scope Can be found. ” Brokerage said that now the market needs to adjust the new fair value of stocks according to the real income of multiple and companies.
Also read- Indian stock market will show power again, India will leave everyone behind in the coming months: Morgan Stanley
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